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I. INTRODUCTION

The following are my comments on the Draft Investment Arbitration Rules of the SIAC. In doing so, I have considered the draft SIAC Investment Arbitration Rules along with the Trans-Pacific Partnership (TPP) Investment Chapter, and the Stockholm Chamber of Commerce (SCC), International Centre for Settlement of Investment Disputes (ICSID), and International Chamber of Commerce (ICC) Rules.

The Basics

The Income Computation and Disclosure Standards (hereinafter ICDS) came into effect on 01 Apr 2015 for the computation of taxable income[1].

The ICDS is to be complied with by all ‘persons’ who follow the mercantile system of accounting, from the assessment year 2016-17

It is a set of ten standards that incorporates various Accounting Standards laid down in Ind-AS. The object is to harmonise the accounting requirements with taxability of an item.

It is applicable solely for the purpose of computation of income chargeable under the heads of “Profits and gains of business or profession” or “Income from other sources” referred to in Sec 145 of the Income Tax Act, 1961

In cases of conflict between ICDS and the Income Tax Act, 1961, the latter shall prevail

It incorporates the concept of ‘Accrual’ as a key element where an income is recognised as it is accrued or earned irrespective of the actual time of receipt of the same.

ICDS IV that deals with Revenue Recognition is the subject matter of the following discussion